Liquidity provider B2C2 has sued Singapore-based crypto exchange Quoine over the latter’s questionable trade practices. According to the local publication The Strait Times, this is the first legal trial in Singapore involving Bitcoin. B2C2 has accused Quoine over alleged trade reversal for cryptocurrency transactions in April 2017.
Both the parties are currently fighting this legal dispute in the Singapore International Commercial Court. B2C2 says that Quoine violated the legal terms of an agreement between the two companies and has claimed to recover over 3000 Bitcoin from Quoine. At the current BTC price, this roughly translates to $12 million.
The B2C2 legal team charges Quoine of “breach of trust” saying that the exchange operator has abused its role as a B2C2 custodian.
The legal document of the court filing notes: “It is B2C2’s contention that in the face of serious risk of itself having to bear the financial loss arising from the trades… Quoine chose the most advantageous course to mitigate such risk – by simply reversing the ‘irreversible’ trades and deducting the… proceeds from the account…”.
During April 2017 last year, Bitcoin was trading around the price of $1200 and later went to hit its lifetime high of $20000 by December 2017. However, since then, there has been a significant recoil in BTC price which is currently trading around $4500 after the latest market crash.
Quoine Defends This as a Programming Glitch
Defending its position on the matter, Quoine said that the trade reversal was primarily because of a programming glitch. The glitch occurred prior to the trade which resulted in the exchange’s inability to fetch accurate price data for Bitcoin. Quine continues to maintain its stand on this matter saying that the exchange then stopped placing new orders which affected even those of B2C2.
Furthermore, Quoine said that the new orders placed B2C2 were absurd as they comprised of very high prices. Quoine notes: “There is no other way than to describe these orders as abnormally and absurdly priced orders, given that they were about 250 times higher than the average price at which (the two currencies) then traded on the platform.”
Even though B2C2’s orders were absurd, it still holds its position that it was not within Quoine’s authority to reverse the trades which were meant to be irreversible. Furthermore, B2C2 also accuses the exchange of violation of custodian agreement saying that the exchange can’t withdraw or deduct digital currency balance without permission and authorization.